By Lateef Adegbite
Barely two weeks after President Bola, Ahmed Tinubu, who incidentally was a former governor of Lagos state returned from Paris, Capital of France, after the New Global Financing signing Pact, Summit, Nigeria appear to have begun to reap the benefits.
The Lagos state born Nigerian President who was said to have met with some of the movers and shakers of the World economy, including Odile Renaud-Basso, President of the European Bank for Reconstruction and evelopment, EBRD and Prof. Benedict Oramah, the President and Chairman of Board of Directors of the African Export –Import Bank, Afrexim, was said to have urged them to invest in Nigeria.
He was said to have urged investors from Europe, Asia and the US, to take advantage of the Nigerian government removal of subsidy on Premium Motor Spirit, PMS, popular, Petrol and the unification of the country’s multiple exchange rates by bridging the gap between the official and parallel market rates to bring funds into Nigeria to invest.
Past and present World Bank Leadership had repeatedly said that the removal of subsidy on fuel importation into the country and unification of exchange rates remain the key to rebuilding the country’s economy. Former President Muammadu Buhari, and embattled Godwin Emefiele, the suspended Central Bank of Nigeria, CBN,governor would not take it. The duo were said to have allowed the naira float in the forex market for fear of losing value.
Encouraged by the response of the International business Community to invest in Nigeria which has given the Nigerian President a big relief may have informed why on Thursday, July 6, 2023, in a bid’’ to create a more conducive environment for businesses to thrive in the country’’ signed four Executive Orders .
Dele Alake, Adviser to the President on Special Duties , Communications and Strategy, disclosed that one of the newly signed Executive Orders is the Finance Act, Effective Date Variation Order, 2023, from May1, 2023 to September1, 2023 . Giving an insider information, he had said that the Executive Order is to ensure adherence to the 90 days minimum advance notice for tax changes as contained in the 2017 National Tax Policy, NTP.
The second Executive Order that was said to have been signed by the Nigerian President is the Customs and Excise Tariff (Variation) Amendment 2023. The new Executive Order was said to have shifted the Customs and Excise Tariff from March 27, 2023 to August 1, 2023, in line with the NTP.
Tinubu , who appears to be in a hurry of making Nigeria to be an attractive investment destination was said to have ordered the suspension of the 5% Excise Tax on Telecommunication services which was removed by the forme Katsina state born Nigerian President in March 2023 but still reintroduced in May 2023. He was said to have also ordered the suspension of Excise duties escalation on locally manufactured products.
Former President Buhari, had approved for the implementation of the 2022, Fiscal Policy , measures made up of the Supplementary Protection Measures, SPM, for the implementation of the Economic Community of West African States, ECOWAS, ,Common External Tariff, CET, , 2022-2026, and Excise duties on non-alcoholic beverages, alcoholic beverages, Cigarettes and Tobacco Products as well as Telecommunication services from April 1, 2022.
The Nigerian President may have gladdened the heart of the Leadership of the Manufacturers Association of Nigeria, MAN, who has been at the vanguard for the removal of the newly introduced Green Tax by way of Excise Tax on single use plastics, including plastic Containers and bottles with its suspension.
He may have issued these Executive Orders to further ameliorate the negative impacts of the tax adjustments on businesses and chokehold on households across the affected sectors of the economy. The suspension of the business killer Excise duties and Taxes was an indications that the new Nigerian President was not totally in support of the Fiscal policies implemented by the previous Administration refused to give any advice on the way forward.
Alake, the President’s Media Aide, who could not hide his feelings over the response of foreign investors to the Nigerian President’s call to invest in Nigeria had that the Administration will continue ‘’to give requisite stimulus by way of friendly policies to allow businesses to flourish in the country’’.
Given the killer business taxes that were introduced by the Buhari Administration which forced some multi-national companies operating in Nigeria to relocate to South Africa and the West African countries of Ghana, Togo and Cotd’Ivoire to do set up their manufacturing plants and take advantage of ECOWAS Trade Liberalisation Scheme, TLS, to sell their products in Nigeria because of the large market.
Until the Nigerian President signed the four Executive Orders to improve the nation’s business environment, he had recently, received a group of joint venture partners made up of UTM FLNG, TECHNIP Energies of France and JGC Corporation of the Asian country of Japan in Abuja, the Federal Capital Territory.
The foreign Joint Venture partners were said to have visited the Nigerian President to conclude the investment discussion for a $5 billion floating Liquefied Natural Gas, LPG, Project, in Nigeria which they had started in Paris during the New Global Financing Pact Signing organised by President Emmanuel Macron.
Julius Rone , the Leader of the delegations and Group Managing Director of the France based UTM LNG had said that a $5bn loan has been signed with Afrexim bank for the implementation of the project in Nigeria.
Rone who has broken the cheery news to Tinubu and who was said to have backed the implementation of the multi-billion dollar project in Nigeria has consistently assured investors of consistency in government policy and removing all forms of ‘’Administrative bottlenecks that had made the country unattractive to investors in the past’’.
The France based UTM LNG, Managing Director had said that that new LPG plant that would be built in Nigeria and which is expected to come on stream in 2026, was designed to produce 300,000 tons of LPG, annually.
He may have gladdened the heart of the Nigerian President when he declared that the project on its own has the capacity to generate 7,000 jobs. The good news about the sighting of the project in Nigeria, described as a home of gas that are being wasted by Shell Petroleum Development Company , SPDC and other Multi-national Oil Companies operating in the Niger Delta region is the involvement of an indigenous company in the decarbonisation efforts in the country.
Recall that Zoe Yjnovic, Global Upstream Director, SPDC, whose Organisation had divested from the nation’s onshore and offshore operations including selling off 45% of its oil and gas assets in OML 17, to Heirs Holdings , an indigenous Oil and Gas Company founded by one Tony Elumelu, a multi-billionaire business mongul, in 2021, was the first to wet Tinubu’s apetite of making a U-turn to reinvest in Nigeria,
The SPDC, Team had told the Nigerian President , that they are willing to ramp to ramp up investment in the country , particular, in the areas of gas and the deep-waters asset by pumping billions of the US dollar into the country. In apparent response to the heart- warming news, the Nigerian President had said that these investments are needed in the country now more than ever to enable the government to meet its obligations to the citizenry.
Recall that the Nigerian President had told the Royal Dutch company, to do everything within their powers to help Nigeria, particular, in the areas of gas to become competitively favourable to the country in the global market.
Another Organisation, the Bank of America, BOA, International, a US, multi-national Investment bank and Financial Services Holding Company , believed to be the second largest Financial Institution, in the North American Continent , country, which has Bernard Mensah, as the President and his team,had visited Tinubu in the recent time as well.
Former President Buhari was said to have woo the US investors in his eight years in office including reaching out to the American Corporate Council on Africa, CCA, and the country‘s officials ministry of Industry, Trade and Investment but they had turned their back on Nigeria.
The former Nigerian President was said to have told the US , investors that are ready to bring funds into Nigeria to establish their business that they will have ‘’access to new markets under the African Continental Free Trade Area, AfCTA that would connect 1.3 billion people across the 55 countries that make up the Continent and a consumer market that will be worth over $3 trillion and a combined Gross Domestic Product at $3.4 billion by 2025’’. He may have been disappointed that the American investors never gave a dam in coming to Nigeria to do business.
The BOA International decision to invest in the Nigerian economy may have opened the door for more US, Companies to bring the much needed forex to invest in Nigeria in the next three years of the Tinubu’s Administration to shore up the country economy.
The US investors would have to compete with the Asian country of China companies that have investments in all sectors of the country’s economy ranging from Construction, food, beverages, beauty products, assembling plants.
Note that the Chinese government and some firms from the country are currently into partnership with the Nigerian Ports Authority, NPA, and the government of Lagos state to establish the Lekki Free Trade Trade Zone, where heavy industries are spring up daily . The Chinese government was said to have taken advantage of its investment opportunities in the Nigerian economy to also reach a deal with the Ogun state government as well to fund the Guangdong Free Trade Zone, OFTZ, in in Igbesa, in the state.